Construction Law Blog
Blog Disclaimer: The content provided on this website is for informational purposes only and is not legal advice. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship. The information provided is intended for general information which may or may not reflect the most current developments. Read More
As part of Washington’s Initiative 1433, approved by voters in November 2016, Washington’s minimum wage will be increased to $13.50 by January 1, 2020. At the time the initiative was approved, Washington’s minimum wage was $9.47 per hour and increased with the cost of living. It was the eighth-highest minimum wage in the country. The federal minimum wage was $7.25. In 2014, Seattle became the first major city to approve a $15 minimum wage.
Initiative 1433 increased the state's minimum wage to $13.50 by January 1, 2020. Thereafter, the minimum wage will be increased with the cost of living. Washington’s minimum wage is set to increase as follows:
On July 6, 2017, Washington’s Governor Jay Inslee signed a new family and medical leave law that will offer paid leave to employees in our state to care for a newborn or newly adopted child or for a serious health condition. Washington’s new law is one of the most generous paid family leave programs in the United States. It was a bipartisan measure, passing the House on a 65-29 vote shortly after the Senate passed it on a 37-12 vote. It is titled the Washington Family Leave Act (WFLA). Contributions to the program will begin in 2019 and benefits will be available to Washington employees starting January 1, 2020.
This paid leave program brings Washington into the small group of states offering paid leave in the United States, which severely lags behind the world in national paid parental leave. According to the WORLD Policy Analysis Center at UCLA, out of 193 countries in the United Nations, only a few do not have a national paid parental leave law: New Guinea, Suriname, a few South Pacific island nations, and the United States.
When issuing citations under the Washington Industrial Safety and Health Act of 1973 (“WISHA”), the Department of Labor and Industries (“L&I”) commonly classifies violations as either “general” or “serious.” The level of severity has an effect on the civil penalty – for example, the civil penalty of “serious” violation can reach $7,000 per violation – as well as the contractor’s safety record. Contractors with poor safety records may pay more for insurance and have a more difficult time procuring work.
The Washington Industrial Safety and Health Act of 1973 (“WISHA”) is a statute that empowered the Department of Labor and Industries (“L&I”) to create and enforce safety and health regulations for nearly all employers and employees in the state. WISHA was the first fully-operational state safety and health program approved by the federal government. Under WISHA, L&I may conduct investigations into employers that it believes to be in violation of a safety of health statute or regulation, and issue a citation. These citations are posted at or near the place of violation, and also are posted online as a matter of public record.
In Washington, general contractors are primarily responsible for compliance with the Washington Industrial Safety and Health Act of 1973 ("WISHA"), even when it comes to the conduct of their subcontractors. If a subcontractor commits a violation, the Washington Department of Labor and Industries ("L&I") may still issue a general contractor a citation. The Board of Industrial Insurance Appeals - the quasi-judicial administrative body charged with reviewing L&I citations - has found a limited exception to a general contractor's "primary responsibility," but only if the general contractor has a safety program that is effective in practice and the violation was the result of unpreventable misconduct.
President Obama, on Thursday, July 31, 2014, signed an Executive Order that requires contractors bidding on federal government work to disclose labor law violations and gives screening assistance to federal agencies awarding contracts. Termed the “Fair Pay and Safe Work Places Executive Order” will apply to companies pursuing federal contracts worth more than $500,000 and becomes effective in 2016. Government statistics indicate this executive order will affect roughly 24,000 businesses that employ 28 million workers on federal contracts. According to a White House fact sheet: “The Executive Order will ensure that the worst actors, who repeatedly violate the rights of their workers and put them in danger don’t get contracts and thus, can’t delay important projects and waste taxpayer money.”
Householder Exemption Does Not Excuse Subcontractor Performing Unlicensed Electrical Work on a Residential Project Owned by General Contractor
On April 28, 2014, Division I of the Washington Court of Appeals held that the householder exception of RCW 19.28.261(6) does not permit a subcontractor to perform unlicensed electrical work on a residential project owned by a general contractor.
Many contractors now carry professional liability insurance in addition to their commercial general liability insurance because of the prevalence of alternative procurement delivery methods, such as general contractor/construction manager and design-build contracts. In the wake of the recent Washington Supreme Court decision in W.G Clark Constr. Co. v. Pac. Nw. Reg'l Council of Carpenters, ___ P.3d ___ (Docket No. 88080-8) (2014), a decision by the United States District Court of Western Washington may give general contractors who do not already carry professional liability insurance another reason to think about procuring such insurance. Read more about the W.G. Clark Constr. Co. decision here.
Recently, Division II of the Washington Court of Appeals held that a Pierce County contract with a son's proprietorship was illegal, void, and unenforceable when the project was competitively bid by the father's proprietorship and awarded to the father by the County. Bankston v. Pierce County, 174 Wn.App. 932, 301 P.3d 495 (Division II, May 21, 2013).
Readers of our Blog will find of interest three construction related bills that had their first public hearings last week. A link to each bill is provided below.
The first two bills were heard in the House Labor and Workforce Development Committee, the third bill was heard in the Senate Committee on Law and Justice:
1. HB1025-Extending the Application of Prevailing Wage Requirements. http://apps.leg.wa.gov/documents/billdocs/2013-14/Pdf/Bills/House%20Bills/1025.pdf.
HB1025 would extend the application for prevailing wage requirements by extending the definition of “public work” to include all publicly subsidized work, construction, alterations, repairs or improvements other than ordinary maintenance if subsidized by the public. The bill provides that:
(5) "Public work" has the same meaning as in RCW 39.04.010, except for purposes of this chapter, "public work" also includes all publicly subsidized work, construction, alterations, repairs, or improvements other than ordinary maintenance. Work is subsidized by the public if:
(a) One or more parties to the contract received or will receive a qualifying tax preference;
(b) One or more parties to the contract received or will receive a loan from the state or any county, municipality, or political subdivision;
(c) The work occurs on land that a party to the contract leases from the state or any county, municipality, or political subdivision; or
(d) The work occurs on land that a party to the contract purchased from the state or any county, municipality, or political subdivision for less than fair market value as determined by the state, county, municipality, or political subdivision at the time of the sale.
This broad definition of what constitutes “public work” would result in a significant expansion of prevailing wage requirements in our state to projects in which a public entity is not even a party to the contract. This would result in significant cost escalation on the projects captured by this expanded definition. I expect substantial opposition to this bill.
2. HB1026-Requiring Use of Resident Workers on Public Works. http://apps.leg.wa.gov/documents/billdocs/2013-14/Pdf/Bills/House%20Bills/1026.pdf.
HB1026 would require specifications for every public works contract to contain a provision requiring that at least 75% of the labor hours be performed by Washington residents. The language of this bill states that residents of states bordering Washington may be considered Washington residents if the border state does not restrict the right of a Washington resident to be employed on public works project in that state. The full text of this bill can be found in the link above.
3. SB5031-Damages to Real Property Resulting from Construction, Alteration, or Repair on Adjacent Property. http://apps.leg.wa.gov/documents/billdocs/2013-14/Pdf/Bills/Senate%20Bills/5031.pdf.
SB5031 would overrule the Washington Supreme Court decision in Vern J. Oja & Assoc. v. Washington Park Towers, Inc., 89 Wn.2d 72, 569 P.2d 1141 (1977), which held that claims for damages to real property resulting from construction activities on adjacent property do not accrue until the construction project is complete. In its place, a two year limitations period would be established so that a lawsuit for damage to real property resulting from construction on adjacent property must be commenced within two (2) years after the damaged property owner first discovered or reasonably should have discovered the damage.
Our understanding is that the proponent of this bill is Sound Transit, which is seeking to limit exposure for damage its projects cause to adjacent property to this two (2) year limitation period from the date the damage is discovered or should have been discovered.
We will supplement this post to advise how these bills progress through committee.